Inside Move: Jackson stirs tax rebate tiff

Helmer, politician disagree on relief dollars

“The Lord of the Rings” director and Kiwi native Peter Jackson has accused Michael Cullen, New Zealand’s finance minister and deputy prime minister, of exaggerating the amount of tax relief given to the hit trilogy and “giving tax breaks a bad name.”

Cullen, who opposes tax incentives, found himself politically obliged when he took office in late 1999 to grandfather finance deals that allowed the trilogy to avoid millions of dollars in tax.

The law has since been changed to outlaw the complicated arrangements and replaced by a grant scheme that refunds 12.5% of expenditure to productions spending more than $30 million here.

Cullen claims “LOTR” and several other films have cost New Zealand taxpayers between $200 million and $250 million over recent years. Officials this week confirmed the actual figure is at the lower end of that range.

But Jackson described the figure as ludicrous and irresponsible. “Cullen knows it’s not true, and yet he’s been capitalizing on that figure as being a bad thing for New Zealanders,” the helmer said.

He said the trilogy paid $70 million in tax in worker wages and “the tax break is considerably less than the tax department got.”

But Inland Revenue officials said it is not at all clear that the tax incentives were necessary to attract the trilogy.

In the first two weeks of its release, “The Lord of the Rings: The Return of the King” is estimated to have earned $779 million in 39 countries.

Cullen said it was hard to know the cost-to-benefit ratio. He said taxpayers had put a lot of money into the project and it was difficult to see concrete proof of the benefits.

“I think it is strange that Peter keeps going on (about this),” he said. “What more does he want?”

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